The recent case of Y v Y [2012] EWHC EWHC 2063 (Fam) is a useful reminder of how the family law courts in England and Wales tend to approach the division of assets upon divorce, where some of the assets available have been inherited by one of the parties. When are inherited assets matrimonial assets? If a property has been used as the family home, it will nearly always be considered to be matrimonial property regardless of whether it was originally inherited and/or owned prior to the marriage. The same will usually apply to assets that have been in some way 'intermingled' e.g. placed in joint names at some stage, or used by the family during the marriage. If an asset has been kept separate and has not been utilised by the couple during the course of the marriage then the individual who inherited it will have a much stronger argument to say that it should be treated as 'non-matrimonial property'. This argument is particularly strong in shorter length marriages. If the court finds that assets are non-matrimonial then they may take the view that those assets should not be divided between the parties and should essentially be ring-fenced in some way. Should inherited assets be divided? However, all arguments over whether property is 'matrimonial property' or 'non-matrimonial property' will be subject to an assessment of the parties needs. The case of White v White in 2000 made it clear that the fact that property is inherited will generally carry little weight (if any) where the financial needs of the other spouse cannot be met without recourse to that property. For the majority of couples there will simply not be enough capital available to enable them to completely disregard an asset because of its inherited nature. The case of Y v Y Even in cases where there are significant assets the courts may have to 'invade' inherited assets, as in Y v Y. In that case after a 26 year marriage the courts awarded the wife 32.5% of the assets available, by giving her a lump sum of over £8.7 million. The assets were nearly all made up of a large estate of land and properties which the husband had inherited. The court held that her needs required her to receive that sum and it reflected the lifestyle that the parties had lived. However, it is important to note that the wife of course did not receive an equal share (as we might have expected if the estate had not been inherited). The extent to which the courts take inherited assets into account will depend on the circumstances of the case and a number of factors; such as the length of the marriage, the financial resources of the parties, their needs and how the assets have been dealt with during the marriage. The advice of a family law solicitor will be vital to ascertain how the court is likely to treat your assets if they are inherited. The family law team at Gateley have extensive experience in this area and are happy to assist with any queries. We can be contacted on 0161 7700.
Gateley provides a specialist family law service with a team based in Manchester. Elizabeth Hassall heads up the family law team, assisted by Esther Edmondson and Joanne Radcliff.
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